Orcadian is pleased to announce that the North Sea Transition Authority (NSTA) has confirmed to the Company that, on the basis of the work that Orcadian and the Proposed Operator intend to undertake on Seaward Production Licence P2244 (“P2244”), NSTA is prepared to agree an extension to the Second Term of Licence P2244, subject to certain conditions detailed below (the “Extension”).

The Extension would change the expiry date of the Second Term of P2244 from 30 November 2023 to 30 November 2025.

As announced on 18 September 2023, Orcadian entered into a non-binding heads of agreement with a North Sea operator, which provided a period of exclusivity to undertake due diligence on P2244, and execute definitive documentation for a farm out, by 30 November 2023. The work programme included in the P2244 extension request, submitted by Orcadian, was prepared jointly with the Proposed Operator and the preparation of documentation is proceeding to plan.

The Extension is conditional on the following:

• Orcadian’s submission, before 30 November 2023, of an application for NSTA consent to:
  • assignment of an interest in P2244 to the Proposed Operator; and
  • appointment of the Proposed Operator as operator of P2244.
• If NSTA consents are granted, the assignment of the interest in P2244 to the Proposed Operator must be completed by 31 March 2024.

At this stage there can be no guarantee that the final agreements will be entered into, or that the farm out will complete but the Directors are progressing on the basis that the agreements will be concluded and that the necessary consents will be forthcoming. Completion of the transaction would be subject to shareholder approval, pursuant to Rule 15 of the AIM Rules for Companies, and the consent of Shell and TGS to the assignment.

NSTA have advised Orcadian that should the above conditions not be met, then P2244 would automatically cease and determine 30 days thereafter.

Steve Brown, Orcadian’s CEO, said:
“We are delighted that the NSTA provided such a prompt response to our licence extension request, and we are working diligently on the necessary documentation so that we can progress this deal as quickly as possible.”

KeyFacts Energy: Orcadian Energy UK country profile